The Best Time to Buy an Apartment

For many, owning an apartment means never paying rent again.

For many, owning an apartment means never paying rent again.

Determining the best time to buy an apartment can depend on many factors, from the weather to the selection of available properties on the market. There are large-scale considerations like interest rates and housing trends and a number of more personal factors like job stability and rent ratios that may have even more bearing on your decision. There is no one best time for everyone, but a list of important factors can help you understand when a purchase makes the most sense for you.

Opportunity

Instead of planning to make your purchase at a precise time of year or time in your life, prepare to jump when an obvious opportunity arises. No matter how long you plan, the apartment you want may not be available. Rather than settle, wait for the right price in the right location and don't miss it. If certain features speak to you, or a specific location is popular and always in demand, search the listings until you see what you've been looking for. Have your finances in order and move without hesitation. The right time for you may have nothing to do with seasons or financial models, and everything to do with action, pure and simple.

First Home

A first home or apartment purchase is not a task to be taken on without foresight. According to Forbes Magazine's Andy Johns, first home buyers should watch interest rates to ensure they're at or near bottom. A failing housing market is another friend to the buyer, who can get much more house for the money if the timing is right. Read into both the long-term health of the location and the property itself so you aren't stuck with a great house in a neighborhood that is past its prime, or vice-versa. Your job is another important factor: If you aren't secure in your employment or you can't count on your income remaining at the same level (or higher) into the foreseeable future, this may not be the right time to buy.

Time of Year

Apartment listings tend to fluctuate throughout the year with high and low periods that see varying numbers of properties up for sale at any one time. The warm-weather months are the time when the most homes are sold each year. With this increased demand comes higher prices and more competition. Buyers are typically better served during the fall and winter months when the market quiets down and there are fewer buyers to bargain against. Early birds who start shopping for an apartment just before the spring rush, or in the holiday period from late November to early January, may have the market to themselves.

Bottom Line

The most important indicator that it may be time to buy an apartment is when the cost of renting overtakes the cost of buying a similar place. Calculate the rent ratio for two similar properties to see if the time has come. To do so, simply divide the sale price of one apartment by the rent price of the other (similar) apartment. If the result is at or near 10, the cost of buying is lower or the same as buying, and a change should be considered.

 

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